What to Know:
- An analyst suggests upcoming XRP spot ETFs could lead to supply shortages within months, potentially driving aggressive price expansion.
- While only four XRP ETFs are currently pending, projections estimate significant daily inflows that could quickly absorb available XRP.
- The tradable supply of XRP is already constrained due to exchange balances shrinking and ecosystem projects locking away substantial amounts.
A Bitcoin trader’s new prediction suggests that XRP could face severe supply shortages sooner than expected. According to the analysis, the combined pressure from the anticipated wave of XRP spot ETFs may compress the available supply within a matter of months. This could set the stage for a significant price increase for XRP.
The core argument centers on the potential impact of pending XRP ETFs. While there are currently four pending spot XRP ETFs, the analyst speculates that substantial inflows into these ETFs could rapidly deplete the available XRP supply. Such capital flow removes hundreds of millions of XRP from the tradable market every 24 hours.
Earlier models from other analysts support the possibility of an accelerated supply shock. These analyses suggest that XRP ETFs could absorb a significant portion of the circulating supply within a year. This accumulation rate could continue until XRP becomes too expensive, naturally slowing inflows.
The prospect of scarcity becomes even more apparent when considering XRP accessible on public exchanges. Exchange balances have been shrinking for months, indicating a tightening of liquidity. Additionally, ecosystem projects are locking away billions more XRP, further reducing the active float.
Despite these forecasts, XRP’s price remains relatively stable, trading under the $2 range. Analysts attribute this lag to the mechanics of ETF accumulation, which primarily occurs over-the-counter (OTC). This keeps demand invisible to spot order books, delaying the price impact even as ETFs quietly accumulate XRP at scale.
In conclusion, while the timing and magnitude of the potential XRP supply shock remain uncertain, the convergence of ETF demand and shrinking exchange balances suggests a bullish outlook for XRP. Investors and traders should closely monitor ETF developments and exchange liquidity to anticipate potential price movements.
Source: Original article
